If you are considering using invoice factoring for your ongoing operational capital needs remember it should only be used as a temporary bridge towards securing conventional (bank) financing. By factoring your accounts receivable to get through a intense growth period you can effectively maneuver through the tough cash squeeze stage as the business gains traction. Access to capital is always the most important aspect to growing a successful business. As mentioned previously, securing bank financing too early may not qualify you for the proper level of financing which could leave you high and dry.
Accessing working capital by factoring invoices is a valuable solution until you build enough revenue assets to qualify for the size of loan that will allow stability. Factoring should be considered as a strategy to get to the next level, not the end all be all of your financing needs. Factoring is a necessary step that brings credibility to your operation by showing that you have the required resources and capabilities to deal with your obligations.